MacroScope

Optimism in Germany is roaring and consumers across the euro zone are starting to become less gloomy. But the latest hard economic data are a reminder of the difference between confidence that things are going to get better, and the hope that they will.

For the moment, we only have the latter.

Friday’s German Ifo business climate survey topped even the highest expectations, as did the ZEW economic sentiment indicator on Tuesday. Euro zone consumer confidence improved this month too, and the mood in financial markets has been largely buoyant since the start of the year.

The hope is that will translate into a growing euro zone economy, but that isn’t happening yet.

“The optimism is out of step with what current real evidence and logic tend to suggest,” argues David Brown of New View Economics.

“German economic confidence surveys seem to be showing more signs of economic spring, but the economy is still struggling with a massive millstone round its neck. The rest of the beleaguered euro zone economy.”

CEOs are, of course, ebullient by nature.

So it's no surprise that confidence about growth prospects is bouncing back as emerging markets continue to barrel along and even sluggish developed economies show signs of recovery.

What is, perhaps, remarkable is just how far confidence has returned. The latest survey of 1,201 company bosses by PricewaterhouseCoopers shows it is back almost to pre-crisis levels.

But how much should we trust the bouncing boardroom Tiggers? There are also plenty of Eeyores in Davos, warning about fiscal deficits, growing economic imbalances and the rising threat from inflation.

Being bullish is, of course, part of the job if you are a CEO.

But sentiment really is improving. The annual PricewaterhouseCoopers survey of 1,200 industry bosses from 52 countries shows a nice pick in in the short- and long-term confidence curves, with 31 percent of those questioned now "very confident" about revenue prospects for the next 12 months and 81 percent plain-vanilla confident.

More remarkable, perhaps, confidence about sales looking out 3 years is now back up around its historic highs.